About Pick of the Day

Every day, I will try to find what I believe is the best looking short term currency trade setup for the upcoming trading day or week. If you're a forex newbie, it can be tricky trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology behind price movements in the foreign exchange markets, so you can learn to analyze your own currency charts and trade on your very own. I will post my ideas and/or reviews through out each session right here, on Twitter and on Facebook.

Pick of the Day: GBP/USD – Close Trade

Regardless of weak UK economic data, Cable rallied high on a broad based USD sell off and hawkish inflation comments from Bank of England officials. Further, buying support is evident even after a surprisingly strong US PPI number. With Consumer Confidence coming up, most likely to disappoint, I am going to close my trade at market to avoid further risk.

Close trade at market (1.9735).
Total: -70 pips
-0.70% loss

Trade Idea: 2008-02-25 19:40

For tonight’s “Pick,” we’re going to take a nice chart setup on Cable as the pair seems to have found resistance just under 1.9700.

On the chart, we can see resistance at the downward sloping trendline and stochastics are trending lower out from overbought territory.

Short GBP/USD at market (1.9665), stop at 1.9765, pt1 at 1.9565, pt2 at 1.9375

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

We do have economic data coming out in the UK during the Euro session and US data (most notably PPI) coming out during the US session, so we may see a bit of volatility in the upcoming trading sessions.

hi guys. this should not be taken as a spoiler but as contingency trade plan… i’m actually on this trade also. shorted at 1.9680. however as you can see we are actually at the end of ‘almost clean’ double bottom formation.
If the 4hr candle closes above 1.9765 (which is also the SL on the original trade idea), maybe you guys want to reverse your position and go long. with target 1 @ 1.9830. and target 2 @ 1.9950 and target 3 @ 2.0100.

hi guys. this should not be taken as a spoiler but as contingency trade plan… i’m actually on this trade also. shorted at 1.9680. however as you can see we are actually at the end of ‘almost clean’ double bottom formation.
If the 4hr candle closes above 1.9765 (which is also the SL on the original trade idea), maybe you guys want to reverse your position and go long. with target 1 @ 1.9830. and target 2 @ 1.9950 and target 3 @ 2.0100.

Hey guys… thanks for the comments! Looks like we saw a broad based US Dollar sell off during the Asia/Euro overlap… the area (1.9700 – 1.9730) may hold as resistance, especially if PPI and other US data comes in dollar positive. If it does, I think we will see the pair move back to about 1.9675. If we see USD negative numbers, a breakout higher is highly possible on overall USD sentiment. My “guess” is that we will see higher PPI and weak Consumer Confidence, so we may see a bit of choppiness during Euro/US overlap. We’ll wait and see…. good luck!

Hey guys… thanks for the comments! Looks like we saw a broad based US Dollar sell off during the Asia/Euro overlap… the area (1.9700 – 1.9730) may hold as resistance, especially if PPI and other US data comes in dollar positive. If it does, I think we will see the pair move back to about 1.9675. If we see USD negative numbers, a breakout higher is highly possible on overall USD sentiment. My “guess” is that we will see higher PPI and weak Consumer Confidence, so we may see a bit of choppiness during Euro/US overlap. We’ll wait and see…. good luck!

If you guys decided to go on contigency plan i talked about earlier, we recovered the lost from original trade and PT1 has been reached.
If you guys are not on the trade yet. Fear not, as it is likely the pair will come down again to resistance line turned support line. Entry idea for those not ont he trade yet. Long @ 1.9775.

If you guys decided to go on contigency plan i talked about earlier, we recovered the lost from original trade and PT1 has been reached.
If you guys are not on the trade yet. Fear not, as it is likely the pair will come down again to resistance line turned support line. Entry idea for those not ont he trade yet. Long @ 1.9775.